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Say this much for exchange-traded funds in 2013: They'll keep drawing new investors. The ETF industry's assets leapt more than 25% to $1.34 trillion in 2012, including a record $185 billion in new money, and show few signs of slowing down. Behind the growth: Stock ETFs are becoming ever less expensive. Market volatility and correlation are keeping stock pickers' success to a minimum, which only helps ETFs, the bulk of which are passively managed. Then there are factors specific to asset classes, like the expanding field of bond ETFs. But big growth for the industry doesn't necessarily mean big changes for investors. Here are three trends to watch.

FEES BECOME LESS—and more—important. Ironically, the price wars of 2012 have made the Holy Grail of low-cost investing—a "free" investment vehicle—closer to attainable on ETFs from the biggest providers, but less important in the process. Even the cost-cutting Vanguard Group was outdone by
Charles Schwabschw 0.127000254000508%Charles Schwab Corp.U.S.: NYSEUSD39.42
0.050.127000254000508%
/Date(1481234550975-0600)/
Volume (Delayed 15m)
:
17497430AFTER HOURSUSD39.4
-0.0200000000000031-0.050735667174023336%
Volume (Delayed 15m)
:
38419
P/E Ratio
32.31147540983606Market Cap
52191705108.6877
Dividend Yield
0.7102993404363267% Rev. per Employee
476928More quote details and news »schwinYour ValueYour ChangeShort position
(ticker: SCHW), which chopped ETF fees as low as 0.04% on some products. At that low level, there's little incremental gain from another fee cut—so other costs become more important. Expect expense ratios to continue to fall in 2013, but watch the conversation turn toward other expenses that affect total return, like tracking error and tax efficiency.

FIDELITY ENTERS THE FRAY. Fidelity Investments will enter the ETF market in a big way in 2013, putting the squeeze on
State Street STT 1.901901901901902%State Street Corp.U.S.: NYSEUSD81.44
1.521.901901901901902%
/Date(1481234534589-0600)/
Volume (Delayed 15m)
:
1281228AFTER HOURSUSD81.1994
-0.240600000000001-0.2954322200392927%
Volume (Delayed 15m)
:
81953
P/E Ratio
16.65439672801636Market Cap
30827939322.995
Dividend Yield
1.8664047151277015% Rev. per Employee
314161More quote details and news »STTinYour ValueYour ChangeShort position
(STT) and a handful of smaller firms. Fidelity's arrival as a player in ETFs has been a long time coming, and there are skeptics. But the emergence of bond powerhouse Pimco as a leader in both fixed-income and actively managed ETFs shows that well-known latecomers with good products can draw lots of investors. Fidelity has filed for both passively managed and actively managed ETFs, with many market observers turning to a new unit in Denver focusing on sector investing as the place to watch. If Fidelity launches a new suite of sector ETFs, it means unprecedented competition for State Street's popular SPDR sector funds, as well as for smaller companies like First Trust that offer sector-specific ETFs. Investors will have more choice; fund sponsors will have more competitive headaches.